CN Net Income Up 20% in 2nd Quarter

Canadian National said that its net income rose 20 percent in the second quarter of 2017 due to strong volume growth across most commodity groups.

The company reported net income of CA$1.03 billion or CA$1.36 diluted earnings per share, compared with CA$858 million, or CA$1.10 diluted EPS, during the second quarter of 2016.

Revenue rose 17 percent to CA$3.3 billion, carloadings increased by 14 percent and revenue ton-miles gained 18 percent compared with the same period in 2016.

In a news release, CN attributed its revenue increases to higher volumes across several sectors, including Canadian grain and fertilizers, overseas intermodal traffic, frac sand, coal and petroleum coke exports, crude oil, and finished vehicles.

Another factor was higher fuel surcharge rates, freight rate increases and the positive translation impact of a weaker Canadian dollar.

Compared with 2016, revenue was up 33 percent for metals and minerals, 33 percent for coal, 23 percent for grain and fertilizers, 20 percent for automotive, 17 percent for intermodal, 12 percent for petroleum and chemicals, and 6 percent for forest products.

Operating expenses rose 18 percent to CA$1.8 billion compared with a year ago.

CN posted an operating ratio of 55.1 percent for the quarter, an increase of 0.6 points over the prior-year quarter.

“Once again, CN delivered solid quarterly performance with strong volume growth across most commodity groups, building on the momentum started in the fourth quarter of 2016,” said President and CEO Luc Jobin in a statement. “Our team of railroaders remained focused on balancing operational and service excellence while efficiently adjusting to the growing demand.”

In looking to the second half of 2017, Jobin said the period will present challenges due to a strengthening of the Canadian dollar.

The Montreal-based railroad said its goals for the remainder of 2017 includes an adjusted diluted earnings per share in the range of CA$4.95 to CA$5.10 compared with last year’s adjusted diluted EPS of CA$4.59.

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